Impact On The Steel Market Prices To Drop - Steel Prices, Steel Investment - Iron And Steel Industry

A Chinese domestic prices in all likely to fall

The second half of 2007, subject to many factors, the Chinese domestic market situation has changed significantly. Mainly remains in the doldrums for the purchase of the demand, a significant increase in the amount of vacant commercial housing market waiting to see a very strong atmosphere. Speculative demand and investment demand, not only the basic out of the market, and demand for self-occupation was delayed. According to the information, and Wuhan in the first half sales of commercial copy number fell 4 percent, since the daily trading volume in Shenzhen in July, decreased 42%, Guangdong term sales fell 20%, Beijing and Shanghai city sharp contraction in trading volume.

At the same time, despite the rising trend of weakening, but housing prices are still rising, real estate investment is also growing rapidly. National Development and Reform Commission recently published data showed in June this year, 70 cities nationwide housing sales price rose 8.2% New home sales price rose 9.2%. According to statistics, total first half of 2008, the national real estate investment rose 35.1%, an increase over the same period last year, up 3.8 percentage points. Affected, the first half of construction steel sales are still good, which is in June this year, construction steel prices rose 5 percent to more than an important foundation.

It is noteworthy that there are signs that this sluggish home sales, price situation can not long be maintained, in recent years has been very strong housing prices rose more substantially likely decline. This downward pressure on prices came mainly from four aspects:

First, since 2005, rapidly rising home prices nationwide, a significant departure from the purchasing power of people's money, must go through a more substantial downward revisions to the potential needs to be released.

Second, funding constraints at this stage the real estate industry must cut prices to sell to survive and develop. Markdown will be the first by a group of smaller, lower capacity of the first to start real estate business to competition for limited market share.

Third, two or three years ago, buying cheap domestic investors began to price 30% lower than Yishou Fang sold second-hand houses, is bound to greatly impact the market price Yishou Fang, dragged down the overall housing price drop.

Fourth, integration of the real estate industry reshuffle looming. Re-shuffle the results a group of disadvantaged business bankruptcy, under the land, works and housing and other assets were forced to cut prices to sell.

For domestic housing prices did not fall down (with a few sharp decline in housing prices than the city), national regulatory goals will be to achieve the critical moment, the real estate sector was created the "rescue" of public opinion, to increase the financial institutions at risk costs in an attempt to promote national loose from the tight policy, which supported a great housing market bubble, for some developers to maintain profits, "Huozhongquli."

Thus, the future occurrence of domestic house prices will sooner or later more substantial downward adjustment in some areas will be dropped at this stage, turn generally fall. The current weak sales, but prices in all of its lower-front sign only.

2, lower housing prices in all, will have a great impact on the domestic steel market

No doubt, a comprehensive national housing prices falling, "to buy up not buying off the" market behavior, and on the decline of "group thinking" amplification effect, a period of time will inevitably lead to oversupply situation in the housing market more severe, more difficult Sales Outstanding developers, construction funds even more tense. The result is less new projects, the construction slowdown in volume growth, and thus building a significant impact on the consumption of steel. This year, housing construction in some parts of the country land Liupai, fully demonstrated the staying power for future residential construction.

Half of this year, though the national real estate development and investment has maintained a relatively high nominal growth, but if you take out more than 8% price increase investment (such as 6-year end of construction steel prices rose more than 50%) after the actual growth rate has been significantly slowed. If in the future the general fall in housing prices, resulting in new projects and construction in the amount of shrinkage, the national real estate investment growth rate has also dropped the name, or a marked decline in the level of growth, it will seriously damage the construction of steel consumption growth prospects.

by: gaga

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